“Wait, wait; don’t sign it yet” I screamed “Have you compared the premium? Will that rider actually goanna benefit you? What is the Tenure?”
The scared couple glanced at each other and nodded “No”
“Huff! You guys literally inspect that tomato with a microscope, and here you are ready to take such big decision without considering other plans and future risks.”
Well don’t worry!http://trucompare.in just saved you by providing you the list of 5 points that you must take care while choosing your term plan.
- Don’t choose term policy as your birthday gift
Term policy is directly proportional to your age. Thus, Premium increase with age, so don’t make unnecessary delay in choosing a term policy. For example, your premium increases the day you turn 20 from 19. So before the no. of candles increase on your birthday cake. Hurry up! Make the decision.
- Take the term early in the life and for longer tenure If you have a baby of 1 year old and you are thinking of delaying in purchasing the term. Think again. You will have to pay higher premium as your child grows older due to the fact that as you grow older, health issues increases. Moreover, make sure you buy this policy for the maximum tenure. So, if you purchase the policy for 15 years and thereafter you plan to increase the tenure, you will have to pay higher premium because of increased age.
- Choose the Sum keeping future requirements in mind. Not taking the term insurance is an unwise decision and being insured even after taking it is a stupidity. Before you calculate the sum that would be required, make sure you keep in mind things like inflation, home loans, education loans, no. of children you are planning or their education or any other such plans you would be taking further in your life. Plan should atleast be 20X of your annual income.
- Choose a payout option as per your family needs
Term Plans also provides you with the different facilities of payout like monthly, lumpsum or a combination. Choose it as per your lifestyle and job stability. So, if you and your wife both are working and earning well, go for a Monthly plan. Now, if you people have taken the loan, then use combination of both lumpsum and monthly. This will ease you up as lumpsum will help you pay the loan and monthly payout can be used.
- Choose a Rider wisely
Riders are extra benefit that you can avail by adding a small sum with your premium. These are the benefits like loss of employment cover, accidental death cover, disability cover, critical illness cover etc. This choice should be in regard with your lifestyle and job risks.
- Don’t choose term policy as your birthday gift
We are usually drawn to buy a term that has lowest premium but that may not be the right choice. Your plan should be according to your requirements.
We have been tracking IRDA claim settlement of insurers for 3+ years.Here is the latest data on IRDA claim settlement ratio of life insurers in 2016-17( for which data is available). Most of the good insurers are now having 95%+ claim settlement ratios in 2016-17.
Max Life Insurance claim settlement ratio for 2016-17- 97.59%
HDFC Life claim settlement ratio for 2016-17-99.16%
ICICI Prudential claim settlement ratio for 2016-17-97.2%
Edelweiss Tokio claim settlement ratio for 2016-17- 93.29%
Kotak Life claim settlement ratio for 2016-17-92.59%
Reliance Life claim settlement ratio for 2016-17- 94.91%
SBI Life claim settlement ratio in 2016-17- 97.98%
Birla Sunlife claim settlement ratio in 2016-17- 94.21%
This also means that one can go for the cheapest term plan with 95%+ claim ratio. You can compare the data at www.trucompare.in/terminsurance
We are in the process of updating our website with the latest data.
Recently I asked someone- What did you learn from the recent train accident near Kanpur? And he gave me a long answer on -how to improve railway security, how Suresh prabhu should resign, so on and so forth..
But he never thought for a second that- this could have happened to him!! And if this were to happen to him, how will his family cope up with the situation- both emotionally and economically! Not to my surprise- he had never imagined such a situation because we never wish to think about death and the negative feelings associated with the same. As a mater of fact, we have been told to be optimism. But the sheer optimism of those 143 passengers couldn’t save them from death and the same optimism is not going to help the children who survived!
How many of those do you think would have a term insurance cover? Not many I guess..
So while it pays to be an optimist, one has to be prepared for worst scenarios in life- that is what will make you and your family navigate such situations in life!
So if you are still avoiding term insurance as it doesn’t give you any return- think again! You could have been one of the passengers in that train that hoped to reach its destination the next day! Think about the financial security this one decision of yours can provide can provide to your family.
So I urge you to have a quick term plan comparison and protect your family today.
Update: Please check updated data for 2016-17( till March 31, 2017) here.
Here is the IRDA claim settlement ratio 2016-17 for a few term life insurance for which data is available .
- HDFC Life has settled about 23006 claims in 2016-17 while rejecting only 123 claims giving it a claim settlement ratio of 98%
- Max Life insurance has settled about 4137 claims in 2016-17 while rejecting about 77 claims giving it a claim settlement ratio of 93%. About 5% claims are pending.
- SBI Life has settled about 19856 claims with claim settlement of 91.6% till Sep 30, 2016
Hdfc Life has also given some statistics on why claims are getting rejected. This is for the first time we are seeing insurers giving reasons for claim rejection:
“Out of 53 repudiated claims,45% were repudiated due to non disclosure of existing health conditions, 19% were repudiated due to misrepresentation of age, 17% were repudiated due to income misrepresentation, 9% were repudiated due to non- disclosure of insurance with other insurance companies prior to our policy, 6% due to misrepresentation of occupation and 4% due to other misrepresentation.”
This information should help you avoid these mistakes while buying a term insurance policy.
To see the latest premiums and claim settlement ratio of term insurance , compare now.